Bush, Cheney, Kerry big tax cut winners

Bush, Cheney, Kerry, too, big tax cut winners

Published 5:30 am, Wednesday, April 14, 2004

WASHINGTON -- Last year's tax cut proved to be a significant windfall for its main architect, saving President Bush tens of thousands of dollars on his 2003 tax returns.

Meanwhile, for Sen. John Kerry of Massachusetts, the Democrat seeking to drive Bush from the White House, his tax burden more than tripled on income that surged with the sale of a million-dollar painting.

Bush and Laura Bush had incomes totaling $822,126, down 4 percent from the $856,058 they reported last year, according to tax returns released Tuesday by the White House.

But the president's taxes fell much more. His federal income tax payment last year dropped $41,229, or 15 percent, from the 2002 level of $268,719.

In all, the tax cut Bush signed into law last summer saved him and his wife $30,858, according to Robert McIntyre, executive director of the labor-backed Citizens for Tax Justice.

Vice President Dick Cheney and his wife, Lynne Cheney, reported income of $1,273,334, up $102,965 or nearly 9 percent from 2002. Their tax burden dropped sharply, to $253,067 from $341,114, a decline of more than $88,000.

Although the Cheneys were easily in the top tax bracket of 35 percent, their effective tax rate fell from 29 percent in 2002 to 20 percent in 2003.

But the Cheneys' declining tax burden was due to other write-offs and was not directly related to the new tax cut, according to Terrence O'Donnell, an attorney for the vice president.

The cut would have lowered the Cheneys' tax payments by an additional $35,400, but they ran afoul of the alternative minimum tax, a parallel tax designed to ensure the affluent pay their fair share. The Cheneys' AMT hit totaled $47,198.

Kerry's income totaled $395,000 last year, up from $144,091. Because he filed a return separate from his wife, Teresa Heinz Kerry, income from her substantial fortune is not included.

The increase in John Kerry's income was almost entirely from capital gains worth $145,805. Those gains came almost exclusively from the March 3 sale of a painting by the Dutch baroque artist Adam Willaerts, which fetched $1.35 million. Kerry's tax payment was $90,575, up from nearly $30,000 last year.

Kerry opposed Bush's tax cuts of 2001 and 2003, but he was a beneficiary. Dividends last year worth $11,047 would have cost him as much as $2,600 more in taxes without last year's cut. His $147,818 salary put him in the 28 percent tax bracket, which was 30 percent before the 2003 tax cut was enacted.

The release of the White House tax returns provided a clear window into the Bushes' and Cheneys' finances, as well as a glimpse at the impact of their economic policymaking. Last year's tax cut lowered the top rate -- paid by households earning more than $311,950 -- from 38.6 percent to 35 percent.

The Cheneys' wages totaled $454,301, including the vice president's $198,600 salary as well as $178,437 in compensation from Halliburton Corp., the oil services giant the vice president once headed. Cheney's office said his deferred compensation was set in 1998.

The Bushes' salaries totaled $397,264.

The tax cut also slashed the tax rate paid on dividends from 38.6 percent for the Cheneys and Bushes to 15 percent, and cut tax rates on most capital gains from 20 percent to 15 percent. Bush reported dividends subject to the new tax rate totaling $10,959. Cheney's qualified dividends were valued at $84,132.

O'Donnell cited two other factors driving the vice president's plunging tax burden: charitable contributions that jumped from $121,983 in 2002 to $321,141 in 2004 -- 39 percent of taxable income -- and tax-exempt interest payments totaling more than $627,000 last year. But, he said, the lower income tax rate was another significant factor, worth $16,800.